We are all Slave now.

[Greedy,Greedy,Greedy]

Originally Posted by Hank Chinaski

this has been debated here before, but the reason the UAW factories were able to provide high wages for work that could be done in other countries for a fraction of the price, is that US union members in other industries would never buy an Asian made car. And in turn UAW workers would never buy a Japanese TV. As long as those constructs held all was good. then they didn't hold anymore. Jobs are farmed out to low wage areas out of greed, at least not in the way you mean. jobs are farmed out because americans will no longer pay for americans to be paid.

My view of this is that there was a massive strategic mistake made by labor organizations and their leadership coming out of WW2, which was to protect their national markets rather than expand their membership internationally. By the 60s the mistake was clear but pretty hard to reverse, especially as US policy started to favor giving access to "our" multinationals to local non-union markets (and we even encouraged countries to set up enterprise zones that often protected multinationals from local unions and workforce rules) and it's just gotten worse.

Many of our multinational trade deals under Obama were starting to build in significant protections for unions in our trading partners. It's a step, but just one of many needing to be taken.

By the way, wages are rising very rapidly in all those places work got farmed out to. Those places are becoming important consumers and not just competitive producers.

[sebastian_dangerfield]

Originally Posted by Greedy,Greedy,Greedy

By the way, wages are rising very rapidly in all those places work got farmed out to. Those places are becoming important consumers and not just competitive producers.

I said this back in 2008: Until emerging market labor costs approach domestic labor costs, we will shed jobs and wages will lag. Hardly revelatory, I know. But worth repeating.

Investors see a timeline emerging where they'll have another 40 or so years to exploit cheap foreign labor (including frontier markets) while creating consumers as emerging markets become developed economies.

They're leaving the American consumer behind. They don't care about him. They figure he's fucked, and there'll be some populism, maybe some socialism, at home. But the CEOs' bet remains:

I can keep depressing labor costs domestically (to the extent I must have them at all), arbitraging labor costs abroad, and developing new consumers abroad to eclipse those I'm losing domestically.

This gets incredibly ugly in the next twenty years. Trump is but an hors d'oeuvre.

[Greedy,Greedy,Greedy]

Originally Posted by sebastian_dangerfield

I said this back in 2008: Until emerging market labor costs approach domestic labor costs, we will shed jobs and wages will lag. Hardly revelatory, I know. But worth repeating.

Investors see a timeline emerging where they'll have another 40 or so years to exploit cheap foreign labor (including frontier markets) while creating consumers as emerging markets become developed economies.

They're leaving the American consumer behind. They don't care about him. They figure he's fucked, and there'll be some populism, maybe some socialism, at home. But the CEOs' bet remains:

I can keep depressing labor costs domestically (to the extent I must have them at all), arbitraging labor costs abroad, and developing new consumers abroad to eclipse those I'm losing domestically.

This gets incredibly ugly in the next twenty years. Trump is but an hors d'oeuvre.

It'll be more than 40 years, because places like Tennessee actually want to compete with Hanoi. Their idea is to get wages low enough and working conditions bad enough so the work will come pouring back....

Trump is willing to help.

[sebastian_dangerfield]

Originally Posted by Greedy,Greedy,Greedy

Trump is willing to help.

In the old days, this would play out over the decades as:

Trade war>Cold war>Regional war>World war

But I think trade has connected us too much for this to occur. Credit the architects of modern trade policy after WWII for that.

So now, with Trump the Dinosaur running a mercantilist policy, I think it'll go:

Trade war>Global recession>Further emphasis on cheap labor exploitation and automation>Further job loss and wage stagnation>Giant fucking societal mess

[Greedy,Greedy,Greedy]

Originally Posted by sebastian_dangerfield

I said this back in 2008: Until emerging market labor costs approach domestic labor costs, we will shed jobs and wages will lag. Hardly revelatory, I know. But worth repeating.

Investors see a timeline emerging where they'll have another 40 or so years to exploit cheap foreign labor (including frontier markets) while creating consumers as emerging markets become developed economies.

They're leaving the American consumer behind. They don't care about him. They figure he's fucked, and there'll be some populism, maybe some socialism, at home. But the CEOs' bet remains:

I can keep depressing labor costs domestically (to the extent I must have them at all), arbitraging labor costs abroad, and developing new consumers abroad to eclipse those I'm losing domestically.

This gets incredibly ugly in the next twenty years. Trump is but an hors d'oeuvre.

Oddly, this leaves open the possibility that having a few billion people enter the market will shrink its total size in dollar terms. Which may well happen.

[sebastian_dangerfield]

Originally Posted by Greedy,Greedy,Greedy

Oddly, this leaves open the possibility that having a few billion people enter the market will shrink its total size in dollar terms. Which may well happen.

That's true. And very creepy.